Nitin Gadkari - ready to plough the National field of discontent with fertile diplomatic ideals ?!!

BYRADHIKA RAMASESHAN

New Delhi, June 27: Forget pride, ground realities are more important.

The BJP and the Janata Dal (United) have salvaged their Bihar alliance from near wreckage after independent internal assessments revealed that together they might just hit the majority mark in the October elections.

Alone, both will be restricted to “dismal” double digits, the internal surveys showed, while the RJD-Lok Janshakti Party duo might sail comfortably towards the halfway figure.

The BJP’s conclusion was without the Dal (U), it might end up picking barely 45 of the 243 Assembly seats, while its ally’s tally could be 10 less. Which means even if they wanted to patch up after the elections, they would be far short of the 122 seats required for a simple majority.

The Dal(U)’s reading, too, wasn’t vastly different.

Nitish Kumar - connected to ground reality ?!!

A political aide of Nitin Gadkari said the BJP president had commissioned a survey when the alliance was in rough waters and a section of state leaders clamoured to call it off. “We keep doing such surveys especially when elections are round the corner. So this was one such exercise but it was also more significant than the others because our relation with our partner was shaky,” the aide said.

The “startling” revelation prompted the leadership to conclude that the Bihar hotheads — who railed against chief minister Nitish Kumar after he returned Rs 5 crore his Gujarat counterpart Narendra Modi had sent as flood relief — would have to be reined in.

“We had to balance our pride against ground realities. Both of us would have lost in the polls,” a Bihar BJP leader conceded.

But a more substantive consideration that weighed with Gadkari and the BJP brass was the threat of the NDA coalition dissipating had Nitish walked out. The BJP, which once trumpeted its “ability” to attract allies like bees to a flower — Atal Bihari Vajpayee had coalesced 24 parties with disparate ideologies — is left with just three. Apart from the Dal(U), they include the Akali Dal and the Shiv Sena.

Narendra Modi - still the fly in the BJP ointment ?!!

“Our claim to be the Congress’s only alternative would have gone for a toss. Apart from Bihar, we had to look at the national picture,” said a general secretary.

By then Nitish, who looked like he was willing to forego his remaining tenure in office and fight the elections solo, had also figured out that his own credibility might be at stake if he forced a confrontation.

The Muslim factor - winning the confidence of India's single largest minority ?!!

“He thought things over with a cool head, especially the issue of Muslim votes. He realised that if in the Lok Sabha elections (of 2009) he could have got 20 per cent or so of the minority votes with (L.K.) Advani as the NDA’s prime ministerial candidate, he can get much more if the coalition stuck to the development agenda. After all, the BJP-Dal(U) government ran largely on our agenda,” a party functionary said.

It was also admitted that his act of returning Modi’s cheque didn’t go down well in the flood-affected areas where people were asking if the colour of donations was more important than the relief they would bring and also why the chief minister had not used the funds so far.

Although the partnership’s endurance will be tested when the modalities of seat-sharing and campaigning are discussed closer to October, it is understood that Nitish has agreed to stick to the 2005 formula of giving 103 seats to the BJP and keeping 140 for himself.

The BJP has conveyed that Modi will be kept out of a “development-centred” election that is expected to revolve around local issues.

Gadkari and Nitish are likely to meet in New Delhi in the first week of July.

OPINION: HOW DISASTERS HAPPEN – Proper corporate governance would have helped Bhopal – a remedial framework in place YET ?!!

Bhopal Disaster - any lessons learnt and action taken ?!!

By S.L. Rao

The world economic recession of 2008 was triggered off by the greed of large financial firms, poor corporate governance in them, and the ineffectiveness of regulatory authorities who had not kept pace with changing markets. There were few self-imposed restraints. Public restraints were ineffective because of poor and biased enforcement. A current example is the massive ongoing oil leak into the Gulf of Mexico from the BP oil well. It seems to have been caused by cost-cutting while overriding well-established industry practices and public regulation biased in favour of the drilling oil companies. The Bhopal disaster of 25 years ago was also caused by poor oversight within Union Carbide, and failure of the Indian and Madhya Pradesh governments to ensure safe practices because of incompetence and perhaps corruption. The welfare of the people was neglected before the disaster and ignored afterwards.

I wonder whether Indian companies and Indian regulatory authorities have learnt from Bhopal. Are all of them prepared to handle disasters? Disasters can arise in many situations: for example, in industry, transport, mining, drilling and in sectors where poisonous or inflammable substances are handled, or when geological disturbances occur.

Union Carbide (now Dow Chemicals) was a diversified multinational company. Such multinational companies have good management structures and staffing in their many operations. Each product, function and region has parallel specialists at headquarters. Each HQ specialist is fully involved in the aspect he specializes in. Every activity and action thus has duplicate (and hence perhaps fail-safe supervision) — at local HQ and multinational HQ. In a production operation all decisions would be double-checked — for example, on the appointment of high level staff, technology, plant layout, production processes and systems, productivity, finances, operating costs, inventories, health, safety, internal audit and so on.

There is such continuous interaction between functional and product departments in each country, frequent mutual visits, conferences, as well as regular reports, which many times lead to instructions for action. The intent is to apply to each of its companies best practices from learnings everywhere. There is no doubt in my mind that many officials at Union Carbide headquarters (and in India) must have known and participated in decisions about the Bhopal plant. Indian investigating agencies obviously did not pursue them.

The Bhopal plant was one among Union Carbide’s many other Indian operations and, as in any well-run company, must have had strong superintendence in India as well. A director must have made regular visits to the Bhopal plant. In most multinational companies, safety is on the agenda of the top management and the board. Production and storage of poisonous gases, their storage and handling and safety standards would have been approved by both Indian and overseas HQs, and periodically reviewed by the board.

If investigators had studied the Indian company records, reports, minutes of internal meetings, and correspondence with the American HQ, people could have been identified for responsibility and held accountable for the tragedy.

How responsible is a non-executive chairman (like the iconic Keshub Mahindra) for a disaster of this magnitude? Such positions carry no executive responsibility.

Twenty-five years ago, corporate governance practices since laid down by the Securities and Exchange Board of India did not exist. The role of independent directors, even non-executive chairmen, was ill-defined and their time poorly remunerated. Even today, when these have changed, unless the operating management discloses the facts, independent directors and non-executive chairmen are unlikely to know the who, why and what of decisions regarding a matter like the storage and handling of poisonous gases.

Satyam is a good example of the wilful non-disclosure of facts by the management. We cannot apply the standards of today to events of 25 years ago. Perhaps though, the non-executive chairman of Union Carbide could have publicly accepted company responsibility, pushed the operating management to clean the site and make it safe, as well as offered help to the victims.

Warren Anderson was in overall charge as the chief executive officer of the multinational company. He is ultimately responsible for the disaster and its aftermath and has to be accountable for it. Union Carbide (and its successor Dow Chemicals) have to take responsibility. Arresting Anderson and letting him go are not vital for the victims’ welfare, compensation, treatment, and cleaning up of the site. Union Carbide has not acted responsibly and has avoided all these. Their managers in India and Union Carbide (now Dow) must be made to pay. Even by standards of 25 years ago there was a failure of corporate governance.

The American government is adopting double standards. Just as it has pushed ultimate responsibility on to BP for the damage due to the oil-well explosion, the Indian government must fix responsibility on Union Carbide, its CEO and the concerned managers. Our political parties and electronic media are hysterical today about less vital matters, after not pursuing them for 25 years.

Instead of relying on the lethargic Indian judicial system, government and civil society organizations can still file class action suits in the United States of America against Union Carbide/Dow. The government could also have intervened in the subsequent sale of the Eveready battery division of Union Carbide to McNeil Magor and seized the amount paid. The government could have threatened to nationalize Union Carbide too.

India was not strong enough to do these things 25 years ago. We were not then the fifth largest economy with nuclear military capability, growing faster than any country except China. A new, young and inexperienced prime minister, succeeding an assassinated mother, in the middle of a hectic national election, had to recognize that India under licence-control-permit raj was vulnerable and could not challenge the wishes of the Reagan administration of the US, the only superpower left, to protect one of their top businessmen. No other prime minister or political party could have acted differently. They did not when they later exercised power.

India’s antiquated laws are an embarrassment today. As we develop industrially, disasters in industries, oil and gas drilling and production, mining, and other accidents, are certain to occur. Our laws, enforcement, monitoring, penalties, disaster management systems, judicial processes for disasters, and so on, should be ready at all times. This has yet to happen, after 25 years. As the US Congress has told BP, “We need agreement that any exploring agency, nuclear plant operator, or anybody in a business that can cause major human or environmental damage to a country as in the Gulf, or to many countries, should follow safe practices laid down by a global group of experts.” India has not even thought of this, let alone the procedures and institutions for the purpose. At least companies should do so.

Our regulatory agencies must enforce legislation and rules, and publish new and tougher ones, for manufacturing and storage of poisonous gases and other such matters. Galloping urbanization demands that strict laws and policing agencies are in place since slums come up quickly in close proximity to factories. Our laws and the judicial mechanism require change to quickly prosecute and penalize the guilty in industrial disasters.

Our governments, instead of passing on blame or being defensive, must put a remedial framework in place. The nuclear liability bill is the first opportunity for comprehensive legislation and implementation mechanisms that will prevent another Bhopal and its subsequent careless handling. It must be suitably extended to other industries.

(The author is former director-general, National Council for Applied Economic Research)